Hidili Industry International Development Ltd. has not repaid a long term secured loan from an offshore bank which fell due on January 4, 2016 and has not paid the accrued interest thereon. The principal amount outstanding and the interest accrued for the period from October 20, 2015 to January 4, 2016 under the Long Term Loan was approximately USD 134 million and approximately USD 0.66 million respectively. The Long Term Loan was secured by a standby letter of credit of RMB 858 million issued by an onshore bank.

As at the date of this announcement, the Offshore Bank has enforced their right over the Standby Letter of Credit to repay the outstanding principal. Upon the enforcement of the Standby Letter of Credit by the Offshore Bank, the Onshore Bank has demanded a settlement of approximately RMB600 million (after deducting the security deposit of RMB 258 million). The company has been in discussions with the Onshore Bank regarding an extension of the settlement.